Modi’s Vision 2.0: Expanding housing for all through PMAY-Grameen and PMAY-Urban

In his Independence Day speech on August 15, 2023, Prime Minister Narendra Modi announced a transformative initiative aimed at supporting weaker sections and middle-class families in owning their homes. In alignment with this vision, the Union Cabinet, led by Prime Minister Narendra Modi, has approved the extension of the Pradhan Mantri Awas Yojana – Gramin (PMAY-G) for the period from FY 2024-25 to 2028-29. This extension, under the Department of Rural Development, will see the construction of an additional two crore houses across rural India, significantly advancing the goal of “Housing for All.” Furthermore, the Union Cabinet, on June 10, 2024, resolved to extend assistance to three crore more rural and urban households for home construction to accommodate the growing number of eligible families. Under the PMAY-U 2.0 scheme, with an investment of Rs 10 lakh crore, the Government aims to address the housing needs of one crore families, ensuring enhanced living conditions for every citizen.

Key features of the PMAY-G Continuation

Target of 2 crore new houses

The continuation of the Pradhan Mantri Awaas Yojana–Gramin (PMAY-G) from April 2024 to March 2029 aims to achieve saturation of the Awaas+ (2018) list, following its updation and address the balance of eligible households on the Socio-Economic Caste Census (SECC) 2011 Permanent Wait List (PWL). This extension will provide essential housing assistance under the overarching target of constructing 2 crore pucca houses equipped with basic amenities. By prioritising the needs of rural communities, the initiative underscores the Government’s commitment to ensuring that every eligible household has access to dignified living conditions, thereby contributing to rural development and poverty alleviation in India.

Financial Outlay

The Government of India has approved a total outlay of Rs 3,06,137 crore for the Pradhan Mantri Awas Yojana-Gramin (PMAY-G) for the fiscal years 2024-25 to 2028-29. This allocation includes a Central Share of Rs 2,05,856 crore, with the remaining Rs 1,00,281 crore to be provided as the State Matching Share. The scheme is set to continue beyond March 2026, contingent upon a comprehensive evaluation by NITI Aayog and a re-appraisal by the Expenditure Finance Committee (EFC). This reflects the Government’s commitment to ensuring the successful completion and continuation of PMAY-G, furthering the mission of providing housing for all in rural areas.

Assistance for Construction

The Awaas+ initiative has been updated to refine the process of identifying eligible rural households by implementing modified exclusion criteria. This adjustment aims to ensure that the assistance is directed more accurately to those in genuine need. The unit cost of assistance for beneficiaries will remain unchanged, with Rs 1.20 lakh allocated for plain areas and Rs 1.30 lakh for the North Eastern Region and the Hill States, maintaining consistency with the existing rates.

Administrative Funds

Administrative funds for the program will be allocated at 2 per cent of the total program funds. Of this, 1.70 per cent will be released to the States and Union Territories (UTs) to support their implementation efforts, while the remaining 0.30 per cent will be retained at the Central level for oversight and coordination. Additionally, the focus will be on completing the houses from the previous phase of the Pradhan Mantri Awaas Yojana – Gramin (PMAY-G) that were left incomplete as of March 31, 2024. These incomplete houses will be addressed during the fiscal year 2024-25, adhering to the existing financial rates to ensure continuity and support for the beneficiaries.

Evaluation and Re-Appraisal

Continuation of the scheme beyond March 2026 will depend on an evaluation by the NITI Aayog and a re-appraisal by the Expenditure Finance Committee (EFC).

Benefits and Impact

Under the Pradhan Mantri Awas Yojana – Gramin, the Government aims to complete the remaining 35 lakh houses by March 31, 2024, achieving the cumulative target of 2.95 crore houses set in the previous phase. This initiative seeks to address the longstanding housing needs of rural India by providing safe, secure, and quality housing to those in need.

Looking ahead, the Government has committed to constructing an additional two crore houses from FY 2024 to 2029 under PMAY-G. This ambitious plan is expected to benefit nearly 10 crore individuals by addressing the housing deficit that has emerged over the years. By facilitating the construction of these homes, the initiative will ensure that all houseless individuals, as well as those living in dilapidated or kutcha houses, have access to secure and well-equipped housing. This effort is designed to enhance safety, hygiene, and social inclusiveness for the beneficiaries, significantly improving their quality of life.

Urban Housing Initiatives: PMAY-U 2.0

Complementing the efforts in rural housing, the Government has also launched the second phase of the Pradhan Mantri Awas Yojana – Urban (PMAY-U 2.0). This phase aims to address the housing needs of one crore families in urban areas with an investment of Rs 10 lakh crore. The scheme is designed to meet the housing requirements of Economically Weaker Sections (EWS), Low Income Groups (LIG), and Middle Income Groups (MIG).

Pradhan Mantri Awas Yojana-Urban 2.0 is a flagship initiative aimed at addressing the housing needs of families belonging to the Economically Weaker Section, Lower Income Group, and Middle Income Group segments in urban areas. Under this scheme, eligible families who do not own a pucca house anywhere in the country can either purchase or construct a house. The eligibility criteria are defined by the household’s annual income, with EWS households having an income of up to Rs 3 lakh, LIG households earning between Rs 3 lakh and Rs 6 lakh, and MIG households earning between Rs 6 lakh and Rs 9 lakh. This initiative reflects the Government’s commitment to ensuring affordable housing for all, especially for the economically vulnerable sections of society.

The coverage of PMAY-U 2.0 extends to all statutory towns as per the Census 2011, as well as towns notified subsequently. Additionally, the scheme also includes areas under the Notified Planning/Development Authority, Industrial Development Authority, Special Area Development Authority, Urban Development Authority, or any such authority established under state legislation that is entrusted with urban planning and regulation. By encompassing a broad range of urban areas, PMAY-U 2.0 ensures that a wide spectrum of urban dwellers, including those in emerging towns and special planning areas, have access to affordable housing solutions, thereby contributing to the vision of ‘Housing for All.’

Funding and Technology Initiatives

Under the PMAY-U 2.0 scheme, the funding mechanism for house construction varies across different verticals, with the cost shared among the Ministry, State/UT/ULB, and eligible beneficiaries. For the Affordable Housing in Partnership (AHP) and Beneficiary Led Construction (BLC) verticals, the Government assistance is Rs 2.50 lakh per unit. The sharing pattern between the Central and State governments depends on the region: UTs without legislature have a 100:0 sharing ratio, UTs with the legislature (Delhi, J&K, Puducherry), North-Eastern States, and Himalayan States (Himachal Pradesh, Uttarakhand) follow a 90:10 ratio, while other states maintain a 60:40 ratio. States/UTs and Urban Local Bodies (ULBs) are encouraged to provide additional support to enhance the affordability of houses. In the ISS vertical, eligible beneficiaries receive a Central Assistance of up to Rs 1.80 lakh in five yearly instalments. The assistance per unit also varies by region: for North-Eastern States, Himachal Pradesh, Uttarakhand, and UTs like J&K, Puducherry, and Delhi, the Central Government contributes Rs 2.25 lakh with a minimum of Rs 0.25 lakh from the State Government. In other UTs, the Central contribution is Rs 2.50 lakh per unit, whereas in remaining States, the Union and State Governments contribute Rs 1.50 lakh and a minimum of Rs 1.00 lakh per unit, respectively.

The Technology & Innovation Sub-Mission (TISM) under PMAY-U 2.0 is set to play a pivotal role in guiding and facilitating States, Union Territories, and other stakeholders in adopting modern, innovative, and green technologies, as well as sustainable building materials. TISM aims to accelerate the construction of quality housing by leveraging these advanced techniques. This initiative will assist States, UTs, and Cities through innovative practices and projects implemented in a challenge mode, with a strong emphasis on disaster-resistant and environmentally friendly technologies. The focus on climate-smart buildings and resilient housing under TISM will not only ensure faster construction but also contribute to creating sustainable and resilient urban infrastructure.

Impact on Urban Housing

To avail the benefits under PMAY-U 2.0, it is imperative for States and Union Territories to develop a comprehensive “Affordable Housing Policy” that incorporates strategic reforms and incentives aimed at fostering an active engagement of public and private entities in promoting the Affordable Housing Ecosystem. This policy should focus on enhancing the affordability of housing by addressing key areas such as land use regulations, streamlined approval processes, innovative financing mechanisms, and incentives for developers. By implementing these reforms, the policy will create a conducive environment for the development of affordable housing, ensuring that more citizens can access quality housing at reasonable costs, ultimately contributing to the broader goal of inclusive urban development.

The Union Cabinet’s approval of the Pradhan Mantri Awas Yojana – Gramin (PMAY-G) extension and the launch of PMAY-U 2.0 mark significant milestones in India’s housing development. These initiatives aim to provide two crore new houses in rural areas and address urban housing needs for one crore families, respectively. By committing substantial financial resources and focusing on modern construction technologies, the Government is reinforcing its pledge to ensure safe, secure, and affordable housing for all, thereby enhancing the quality of life and fostering inclusive growth across the country.